Chinese Banks View Expansion Cautiously

While the shares of Chinese banks have fallen in recent months along with those in other countries, China’s banks may be in better shape to weather the storm.

Banks such as Industrial & Commercial Bank of China Ltd., Bank of China Ltd. and China Construction Bank Corp. have big cash hoards and have suffered only minor hits from the collapse of major U.S. institutions such as Fannie Mae, Freddie Mac and Lehman Brothers Holdings Inc.

These Chinese banks focus on the businesses of taking deposits and making loans, with little presence in the complex financial products that helped spark the credit crisis. They have benefited from infusions of cash from Chinese government support and efforts to strip bad loans off their balance sheets — although it isn’t clear how many of their recent loans could also end up turning sour.